2014 Indiana Code TITLE 36. LOCAL GOVERNMENT ARTICLE 7. PLANNING AND DEVELOPMENT CHAPTER 26. ECONOMIC DEVELOPMENT PROJECT DISTRICTS
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IC 36-7-26
Chapter 26. Economic Development Project Districts
IC 36-7-26-1
Application of chapter
Sec. 1. This chapter applies to the following:
(1) A city having a population of more than eighty thousand five
hundred (80,500) but less than one hundred thousand (100,000).
(2) A city having a population of more than one hundred
thousand (100,000) but less than one hundred ten thousand
(110,000).
(3) A city having a population of more than one hundred fifty
thousand (150,000) but less than five hundred thousand
(500,000).
(4) A city having a population of more than one hundred ten
thousand (110,000) but less than one hundred fifty thousand
(150,000).
As added by P.L.35-1990, SEC.63. Amended by P.L.12-1992,
SEC.172; P.L.185-2001, SEC.6 and P.L.291-2001, SEC.200;
P.L.170-2002, SEC.160; P.L.177-2002, SEC.14 and P.L.178-2002,
SEC.120; P.L.119-2012, SEC.208.
IC 36-7-26-2
Legislative findings and declarations; construction
Sec. 2. (a) Present economic conditions in certain areas of certain
cities are stagnant or deteriorating.
(b) Present economic conditions in such areas are beyond remedy
and control by existing regulatory processes because of the
substantial public financial commitments necessary to encourage
significant increases in economic activities in such areas.
(c) Encouraging economic development in these areas will:
(1) attract new businesses and encourage existing business to
remain or expand;
(2) increase temporary and permanent employment
opportunities and private sector investment;
(3) protect and increase state and local tax bases; and
(4) encourage overall economic growth in Indiana.
(d) Redevelopment and stimulation of economic development
benefit the health and welfare of the people of Indiana, are public
uses and purposes for which the public money may be spent, and are
of public utility and benefit.
(e) Economic development in such areas can be accomplished
only by a coordinated effort of local and state governments.
(f) This chapter shall be liberally construed to carry out the
purposes of this chapter and to provide cities with maximum
flexibility to accomplish those purposes.
As added by P.L.35-1990, SEC.63.
IC 36-7-26-3
"Adjustment factor" defined
Sec. 3. As used in this chapter, "adjustment factor" means the
amount, stated as a percentage, that the board determines under
section 22 of this chapter should be applied in determining the
district's net increment. However, the adjustment factor may not
exceed eighty percent (80%).
As added by P.L.35-1990, SEC.63.
IC 36-7-26-4
"Base period amount" defined
Sec. 4. As used in this chapter, "base period amount" means the
aggregate amount of state gross retail and use taxes remitted under
IC 6-2.5 by the businesses operating in the district during the full
state fiscal year that precedes the date on which the commission
confirmed the resolution designating the district.
As added by P.L.35-1990, SEC.63.
IC 36-7-26-5
"Board" defined
Sec. 5. As used in this chapter, "board" refers to the state board of
finance created in IC 4-9.1-1.
As added by P.L.35-1990, SEC.63.
IC 36-7-26-6
"Commission" defined
Sec. 6. As used in this chapter, "commission" refers to a
redevelopment commission established under IC 36-7-14.
As added by P.L.35-1990, SEC.63.
IC 36-7-26-7
"Department" defined
Sec. 7. As used in this chapter, "department" refers to the
department of state revenue.
As added by P.L.35-1990, SEC.63.
IC 36-7-26-8
"District" defined
Sec. 8. As used in this chapter, "district" refers to an economic
development project district established under this chapter.
As added by P.L.35-1990, SEC.63.
IC 36-7-26-9
"Fund" defined
Sec. 9. As used in this chapter, "fund" refers to the sales tax
increment financing fund established in section 23 of this chapter.
As added by P.L.35-1990, SEC.63.
IC 36-7-26-10
"Gross increment" defined
Sec. 10. As used in this chapter, "gross increment" means the
aggregate amount of state gross retail and use taxes that are remitted
under IC 6-2.5 by businesses operating in the district, as determined
by the department under section 23 of this chapter, minus the base
period amount.
As added by P.L.35-1990, SEC.63.
IC 36-7-26-11
"Local public improvement" defined
Sec. 11. As used in this chapter, "local public improvement"
means any redevelopment project or purpose of a commission or any
city under this chapter or IC 36-7-14.
As added by P.L.35-1990, SEC.63.
IC 36-7-26-12
"Net increment" defined
Sec. 12. As used in this chapter, "net increment" means, for a
particular state fiscal year, the product of:
(1) the gross increment for the state fiscal year ending in the
year of the determination; multiplied by
(2) the adjustment factor.
As added by P.L.35-1990, SEC.63.
IC 36-7-26-13
Power and duties of commission, department, and board
Sec. 13. In addition to the powers and duties set forth in any other
statute, a commission, the department, and the board have the powers
and duties set forth in this chapter.
As added by P.L.35-1990, SEC.63.
IC 36-7-26-14
Compilation of data; requirements for proposed districts
Sec. 14. (a) Whenever a commission determines that the
redevelopment and economic development of an area situated within
the commission's jurisdiction may require the establishment of a
district, the commission shall cause to be assembled data sufficient
to make the determinations required under section 15 of this chapter,
including the following:
(1) Maps and plats showing the boundaries of the proposed
district.
(2) A complete list of street names and the range of street
numbers of each street situated in the proposed district.
(3) A plan for the redevelopment and economic development of
the proposed district. The plan must describe the local public
improvements necessary or appropriate for the redevelopment
or economic development.
(b) For a city described in section 1(2) or 1(3) of this chapter, the
proposed district must contain a commercial retail facility with at
least five hundred thousand (500,000) square feet, and any
distributions from the fund must be used in the area described in
subsection (a) or in areas that directly benefit the area described in
subsection (a).
(c) For a city described in section 1(4) of this chapter, the
proposed district may not contain any territory outside the boundaries
of a redevelopment project area established within the central
business district of the city before 1985.
As added by P.L.35-1990, SEC.63. Amended by P.L.185-2001, SEC.7
and P.L.291-2001, SEC.201; P.L.185-2005, SEC.51.
IC 36-7-26-15
Resolution declaring area as district; adoption
Sec. 15. After compilation of the data required by section 14 of
this chapter, the commission may adopt a resolution declaring the
area described under section 14 of this chapter as a district. The
commission may adopt the resolution only after finding that the
completion of the redevelopment and economic development of the
district will do all of the following:
(1) Attract new business enterprises to the district or retain or
expand existing business enterprises in the district.
(2) Benefit the public health and welfare and be of public utility
and benefit.
(3) Protect and increase state and local tax bases or revenues.
(4) Result in a substantial increase in temporary and permanent
employment opportunities and private sector investment within
the district.
As added by P.L.35-1990, SEC.63.
IC 36-7-26-16
Submission of resolution for approval; requirements; publication
of notice of adoption; content
Sec. 16. (a) Upon adoption of a resolution designating a district
under section 15 of this chapter, the commission shall submit the
resolution to the board for approval. In submitting the resolution to
the board, the commission shall deliver to the board:
(1) the data required under section 14 of this chapter;
(2) the information concerning the proposed redevelopment and
economic development of the proposed district; and
(3) the proposed utilization of the revenues to be received under
section 23 of this chapter.
This information may be modified from time to time after the initial
submission. The commission shall provide to the board any
additional information that the board may request from time to time.
(b) Upon adoption of a resolution designating a district under
section 15 of this chapter, and upon approval of the resolution by the
board under subsection (a), the commission shall publish (in
accordance with IC 5-3-1) notice of the adoption and purport of the
resolution and of the hearing to be held. The notice must provide a
general description of the boundaries of the district and state that
information concerning the district can be inspected at the
commission's office. The notice must also contain a date when the
commission will hold a hearing to receive and hear remonstrances
and other testimony from persons interested in or affected by the
establishment of the district. All affected persons, including all
persons or entities owning property or doing business in the district,
shall be considered notified of the pendency of the hearing and of
subsequent acts, hearings, adjournments, and resolutions of the
commission by the notice given under this section.
As added by P.L.35-1990, SEC.63.
IC 36-7-26-17
Hearing
Sec. 17. At the hearing, which may be adjourned from time to
time, the commission shall hear all persons interested in the
proceedings and shall consider all written remonstrances that have
been filed with the commission.
As added by P.L.35-1990, SEC.63.
IC 36-7-26-18
Final action on resolution
Sec. 18. After considering the evidence presented at the hearing,
the commission shall take final action confirming, modifying and
confirming, or rescinding the resolution. The action taken by the
commission is final, except that an appeal may be taken under section
19 of this chapter.
As added by P.L.35-1990, SEC.63.
IC 36-7-26-19
Appeal; dismissal; bond; burden of proof
Sec. 19. (a) A person who filed a written remonstrance with the
commission under section 17 of this chapter and is aggrieved by the
final action taken, may within ten (10) days after that final action, file
an appeal in the office of the clerk of the circuit or superior court with
a copy of the resolution of the commission and the person's
remonstrance against that resolution.
(b) If an appeal is filed, the commission may petition that the
appeal be dismissed unless the remonstrator posts a bond with a
surety approved by the court payable to the commission for the
payment of all damages and costs that may accrue by reason of the
filing of the lawsuit if the commission prevails. A hearing on a
petition to dismiss an appeal shall be conducted in the same manner
as a hearing on a temporary injunction under IC 34-26. If at the
hearing the court determines that the remonstrator cannot establish
facts that would entitle the remonstrator to a temporary injunction,
the court shall set the amount of the bond to be filed by the
remonstrator in an amount found by the judge to cover all damages
and costs that may accrue to the commission because of the appeal if
the commission prevails. If no bond is filed by the remonstrator with
sureties approved by the court within ten (10) days after the court's
order is entered, the suit shall be dismissed, and no court has further
jurisdiction of the appeal or any other lawsuit involving any issue that
was or could have been raised in the appeal.
(c) The burden of proof in the appeal is on the remonstrator.
(d) An appeal under this section shall be promptly heard by the
court without a jury. All remonstrances upon which an appeal has
been taken shall be consolidated and heard and determined within
thirty (30) days after the time of the filing of the appeal.
Notwithstanding any other law, the court shall decide the appeal
based on the record and evidence before the commission, not by trial
de novo, and may sustain the remonstrance only if the court finds that
the actions of the commission in adopting the resolution were
arbitrary and capricious.
(e) The court may confirm the final action of the commission or
sustain the remonstrances. The final judgment of the court is final and
conclusive, unless an appeal is taken as in other civil actions. An
appeal to the court of appeals or supreme court has priority over all
other civil appeals.
(f) Either the remonstrator or the commission may appeal the court
order to the Indiana supreme court within the ten (10) day period by
notice of appeal on a statement of errors in the same manner as is
provided in a petition for mandate or prohibition. The supreme court
may stay the lower court order pending its own decision, may set a
bond to be filed by the remonstrator, may modify the order of the
lower court, or may enter the court's order as the final order in a case.
As added by P.L.35-1990, SEC.63. Amended by P.L.1-1998,
SEC.211.
IC 36-7-26-20
Approval of district by ordinance
Sec. 20. The determination of the commission to create a district
under this chapter, after approval by the board, must be approved by
ordinance of the legislative body of the city.
As added by P.L.35-1990, SEC.63.
IC 36-7-26-21
Delivery of copy of resolution to department; list of street names
and numbers
Sec. 21. After the approval of the creation of the district under
section 20 of this chapter, the commission shall transmit to the board
for delivery to the department the following:
(1) A certified copy of the resolution designating the district, as
confirmed by the commission.
(2) A complete list of street names and the range of street
numbers of each street situated within the district.
As added by P.L.35-1990, SEC.63.
IC 36-7-26-22
Base period amount; adjustment factor; determination; operation
of business outside district; certification of taxes remitted
Sec. 22. (a) Within sixty (60) days after receipt from the
commission of the information transmitted under section 21 of this
chapter the board shall do the following:
(1) Request that the department determine the base period
amount. The department shall certify the base period amount to
the board and the board shall transmit the certification to the
commission.
(2) Determine the adjustment factor. The adjustment factor must
account for the portion of the incremental state gross retail and
use tax revenues attributable to investment in the district and
resulting from the redevelopment and economic development
project. The adjustment factor may not be decreased after the
factor is determined by the board.
(b) If a business that operates or did operate in the district also has
or had one (1) or more other places of business operating in Indiana
but outside the district, the business shall, in the manner and for the
periods of time requested by the department, certify to the department
the amount of taxes remitted by the business under IC 6-2.5 for the
business's places of operation that are or were in the district.
As added by P.L.35-1990, SEC.63.
IC 36-7-26-23
Net increment for preceding fiscal year; sales tax increment
financing fund; district business disclosure of information
Sec. 23. (a) Before the first business day in October of each year,
the board shall require the department to calculate the net increment
for the preceding state fiscal year. The department shall transmit to
the board a statement as to the net increment in sufficient time to
permit the board to review the calculation and permit the transfers
required by this section to be made on a timely basis. Taxpayers
operating in the district shall report annually, in the manner and in the
form prescribed by the department, information that the department
determines necessary to calculate the net increment. A taxpayer
operating in the district that files a consolidated tax return with the
department also shall file annually an informational return with the
department for each business location of the taxpayer within the
district. If a taxpayer fails to report the information required by this
section or file an informational return required by this section, the
department shall use the best information available in calculating the
net increment.
(b) There is established a sales tax increment financing fund to be
administered by the treasurer of state. The fund is comprised of two
(2) accounts called the net increment account and the credit account.
(c) On the first business day in October of each year, that portion
of the net increment calculated under subsection (a) that is needed:
(1) to pay debt service on the bonds issued under section 24 of
this chapter or to pay lease rentals under section 24 of this
chapter; and
(2) to establish and maintain a debt service reserve established
by the commission or by a lessor that provides local public
improvements to the commission;
shall be transferred to and deposited in the fund and credited to the
net increment account. Money credited to the net increment account
is pledged to the purposes described in subdivisions (1) and (2),
subject to the other provisions of this chapter.
(d) On the first business day of October in each year, the
remainder of:
(1) eighty percent (80%) of the gross increment; minus
(2) the amount credited to the net increment account on the
same date;
shall be transferred and credited to the credit account.
(e) The remainder of:
(1) the gross increment; minus
(2) the amounts credited to the net increment account and the
credit account;
shall be deposited by the auditor of state as other gross retail and use
taxes are deposited.
(f) A city described in section 1(2), 1(3), or 1(4) of this chapter
may receive not more than fifty percent (50%) of the net increment
each year. During the time a district exists in a city described in
section 1(3) or 1(4) of this chapter, not more than a total of one
million dollars ($1,000,000) of net increment may be paid to the city
described in section 1(3) or 1(4) of this chapter. During each year that
a district exists in a city described in section 1(2) of this chapter, not
more than one million dollars ($1,000,000) of net increment may be
paid to the city described in section 1(2) of this chapter.
(g) The auditor of state shall disburse all money in the fund that
is credited to the net increment account to the commission in equal
semiannual installments on November 30 and May 31 of each year.
As added by P.L.35-1990, SEC.63. Amended by P.L.185-2001, SEC.8
and P.L.291-2001, SEC.202; P.L.177-2002, SEC.15 and
P.L.178-2002, SEC.121; P.L.261-2013, SEC.43.
IC 36-7-26-24
Bonds; issuance; lease rental payments; remitted funds;
distributions
Sec. 24. (a) The commission may issue bonds, payable in whole
or in part, from money distributed from the fund to the commission,
to finance a local public improvement under IC 36-7-14-25.1 or may
make lease rental payments for a local public improvement under
IC 36-7-14-25.2 and IC 36-7-14-25.3. The term of any bonds issued
under this section may not exceed twenty (20) years, nor may the
term of any lease agreement entered into under this section exceed
twenty (20) years. The commission shall transmit to the board a
transcript of the proceedings with respect to the issuance of the bonds
or the execution and delivery of a lease agreement as contemplated
by this section. The transcript must include a debt service or lease
rental schedule setting forth all payments required in connection with
the bonds or the lease rentals.
(b) On January 15 of each year, the commission shall remit to the
treasurer of state the money disbursed from the fund that is credited
to the net increment account that exceeds the amount needed to pay
debt service or lease rentals and to establish and maintain a debt
service reserve under this chapter in the prior year and before May 31
of that year. Amounts remitted under this subsection shall be
deposited by the auditor of state as other gross retail and use taxes are
deposited.
(c) The commission in a city described in section 1(2) of this
chapter may distribute money from the fund only for the following:
(1) Road, interchange, and right-of-way improvements.
(2) Acquisition costs of a commercial retail facility and for real
property acquisition costs in furtherance of the road,
interchange, and right-of-way improvements.
(3) Demolition of commercial property and any related expenses
incurred before or after the demolition of the commercial
property.
(4) For physical improvements or alterations of property that
enhance the commercial viability of the district.
(d) The commission in a city described in section 1(3) of this
chapter may distribute money from the fund only for the following
purposes:
(1) For road, interchange, and right-of-way improvements and
for real property acquisition costs in furtherance of the road,
interchange, and right-of-way improvements.
(2) For the demolition of commercial property and any related
expenses incurred before or after the demolition of the
commercial property.
(e) The commission in a city described in section 1(4) of this
chapter may distribute money from the fund only for the following
purposes:
(1) For:
(A) the acquisition, demolition, and renovation of property;
and
(B) site preparation and financing;
related to the development of housing in the district.
(2) For physical improvements or alterations of property that
enhance the commercial viability of the district.
As added by P.L.35-1990, SEC.63. Amended by P.L.185-2001,
SEC.9; P.L.291-2001, SEC.203; P.L.1-2002, SEC.161;
P.L.177-2002, SEC.16 and P.L.178-2002, SEC.122.
IC 36-7-26-25
Maximization of use of tax increment financing by city; property
tax abatements
Sec. 25. The board may not approve a resolution under section 16
of this chapter until the board has satisfied itself that the city in which
the proposed district will be established has maximized the use of tax
increment financing under IC 36-7-14 or IC 36-7-14.5 to finance
public improvements within or serving the proposed district. The city
may not grant property tax abatements to the taxpayers within the
proposed district or a district, except that the board may approve a
resolution under section 16 of this chapter in the proposed district or
a district in which real property tax abatement not to exceed three (3)
years has been granted.
As added by P.L.35-1990, SEC.63. Amended by P.L.146-2008,
SEC.769.
IC 36-7-26-26
Credit account; use of funds
Sec. 26. To the extent prescribed by the board, and subject to the
terms and conditions established by the board, any money credited to
the credit account may be used by the commission, and, if desired by
the board, irrevocably pledged by the board, to further secure bonds
or a lease agreement issued or entered into under this chapter. Further
security includes, the following:
(1) Holding money in the credit account and pledging sums to
payment of debt service on bonds issued under or lease rentals
payable under this chapter, or maintenance of debt service
reserves.
(2) Transferring money from the credit account to the net
increment account or, if desired by the board, to the commission
to enable the commission to finance local public improvements.
(3) Payment of bond insurance premiums or other credit
enhancement fees and expenses.
As added by P.L.35-1990, SEC.63.
IC 36-7-26-27
Repeal or amendment of chapter; adverse effect on bond owners
Sec. 27. The general assembly covenants that this chapter will not
be repealed or amended in a manner that will adversely affect the
owner of bonds issued under this chapter.
As added by P.L.35-1990, SEC.63.
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